What a machiya actually is
Machiya are traditional wooden townhouses, historically built narrow and deep to fit tightly onto merchant-era city streets, with a shopfront-style entrance leading back through a sequence of rooms. Many that survived into the modern era have been carefully renovated rather than demolished, preserving original wooden beams and layouts while adding modern plumbing and insulation.
How they differ from a ryokan
Unlike a full-service ryokan, a machiya guesthouse is generally self-catered or lightly serviced — no kaiseki dinner, no staff laying out your futon while you're away, often no communal bath. What you get instead is a genuine historic building, usually a whole house or floor to yourself, and a much quieter, more residential feel than a hotel.
Who this suits
Machiya stays work particularly well for small groups or families wanting more space and privacy than a hotel room offers, and for anyone who wants a tangible piece of old Osaka architecture as part of the trip rather than just reading about it in a museum.